Bitcoin falls below $80,000 as US inflation hits four-year high
Bitcoin dips as US inflation data shocks markets
Bitcoin fell below $80,000 on Thursday after US inflation data came in much higher than expected. The drop followed a report showing that producer prices rose 6.3% in September, well above the 5.3% that analysts had predicted. That marks the largest one-month jump since March 2022.
BTC dropped as much as 1.8% on the day, reaching its lowest level since September 18. It later recovered to around $81,000.
Key numbers from the inflation report
- US producer price index (PPI) rose 6.3% in September, compared with a 5.3% forecast
- Core PPI, which strips out food and energy, rose to 5% from an expected 4.4%
- The 100-basis-point overshoot was the biggest monthly gain for PPI since March 2022
- BTC fell to its lowest level since September 18 before rebounding to roughly $81,000
What the Bureau of Labor Statistics said
The US Bureau of Labor Statistics confirmed that the September increase was the largest advance since March 2022. On an unadjusted basis, the index for final demand climbed 6.3% over the 12 months ending in September, its largest annual increase since December 2022.
Bond yields fall even as inflation rises
Despite the hot inflation numbers, US bond yields did not rise. The 10-year Treasury yield was down nearly 3% at the time of writing, near its lowest level since September 23.
Economist Mohamed El-Erian called the PPI result "even more striking" than a separate consumer inflation report released the day before. Former Goldman Sachs FX strategist Robin Brooks noted that bond yields appear to have "decoupled" from US macro data. He said market focus has shifted to the federal budget deficit rather than inflation figures. The 30-day correlation between positive data surprises and daily moves in the 10-year yield dropped from around 0.6 earlier in 2026 to just below zero by late August, according to Brooks.
Analysts eye potential retest of lower trend lines
Bitcoin price analysis highlighted two key support levels: the 21-week exponential moving average at $76,144 and the 50-week EMA at $78,459. The 21-week and 50-week EMAs are technical indicators that track the average price over those periods and are often used by traders to gauge trend direction.
Trader and analyst Rekt Capital said BTC could still revisit both levels in what he described as a "volatile retest," which would be consistent with patterns seen in early-stage bull markets. However, he noted these deviations typically happen after the two EMAs cross over bullishly, and Bitcoin has not yet seen that crossover.
Analyst Aksel Kibar observed that Bitcoin's recent weekly close around $83,700 lacked strength as a breakout. He said a weekly close inside its recent range could lead to wider consolidation between $60,000 and $82,800, with $75,000 as a key level to watch.
Why this matters for crypto markets
The hotter-than-expected inflation data adds pressure to risk assets, including crypto. It comes a day after consumer inflation (CPI) also exceeded forecasts, and on the same day that South Korea's KOSPI Composite Index fell 7.5% amid a broader tech sell-off. Higher inflation can lead investors to expect tighter monetary policy from the Federal Reserve, which tends to weigh on speculative assets like Bitcoin.
What is still unclear
It remains uncertain whether Bitcoin will hold above the $78,000 to $76,000 support zone or break lower. Whether bond yields will eventually respond to the inflation surge is also unclear, given the current decoupling that analysts have observed.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.